CREDIT IN LONDON.

Ashburton Guardian, Volume 59, Issue 45, 2 December 1938, Page 5

CREDIT IN LONDON.

FALL IN THE TRADE BALANCE.

ADVICE TO NEW ZEALAND

(United Press Association —Copyright.) LONDON, Dec. 1.

The “Daily Herald,” recording the abatement of the New Zealand exchange flurry, which provoked an increase in the discount rate, says that a deficit in the balance of payments of £7,000,000 to £8,000,000 is likely, but the London funds have fallen by nearly £12,000,000, the difference of £4,000,000 to £0.000,000 measuring the amount of capital exported during the year betore the election. The “Daily Herald” suggests if the Socialist experiment is being built firmly, it would bo worth considering in advance measures that .might be taken to meet a fall in the export, surplus or a flight of capital. If it becomes substantial, the -falling export surplus might lie, countered bv higher tariffs on luxuries or by suitable devaluation, • which should not he regarded as a .disaster, but as a natural economic adjustment. A real flight of capital could be met by refusal to grant foreign exchange for the purpose. Meanwhile,' the ~ '"‘Daily Herald’’ adds, it would probably ho wise to moderate momentarily "»the expansionist, policy, .particularly loans for public works from the.. Reserve Bank.